S.B. 43

1

POST-RETIREMENT EMPLOYMENT

2

AMENDMENTS

3

2010 GENERAL SESSION

4

STATE OF UTAH

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Chief Sponsor: Daniel R. Liljenquist

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House Sponsor:
____________

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LONG TITLE
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General Description:
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This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
11
provisions related to a retiree who returns to work for a participating employer and to
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maximum retirement allowance restrictions.
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Highlighted Provisions:
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This bill:
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. defines certain terms;
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. repeals a requirement that a participating employer who hires a retiree contribute the
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same percentage of a retiree's salary that the participating employer would have
18
been required to contribute if the retiree were an active member of the retirement
19
system;
20
. requires a participating employer who hires a retiree to contribute the amortization
21
rate for the reemployed retiree to the retirement system that would have covered the
22
retiree in the new position;
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. provides that a retiree from the Utah State Retirement System who returns to work
24
with a participating employer on or after July 1, 2010 is returned to active member
25
status to earn additional service credit but:
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. the retiree's allowance is canceled; and
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. the employer's retirement contribution is made to the retirement system on

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behalf of the retiree for additional service credit;
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. provides that a retiree who begins reemployment on a part-time basis with any
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participating employer on or after July 1, 2010 is subject to certain earnings
31
limitations;
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. repeals the maximum allowance that a member may receive for a member who
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initially retires on or after July 1, 2010, in the following systems:
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. the Public Safety Contributory Retirement System;
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. the Public Safety Noncontributory Retirement System;
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. the Firefighters Retirement System;
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. the Judges' Contributory Retirement System; and
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. the Judges' Noncontributory Retirement System; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill takes effect on July 1, 2010.
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Utah Code Sections Affected:
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AMENDS:
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49-11-102, as last amended by Laws of Utah 2009, Chapter 101
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49-11-405, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-11-504, as last amended by Laws of Utah 2009, Chapter 101
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49-12-701, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-13-701, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-14-402, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-15-402, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-16-203, as last amended by Laws of Utah 2005, Chapter 116
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49-16-402, as last amended by Laws of Utah 2003, Chapter 240
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49-17-402, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-18-402, as renumbered and amended by Laws of Utah 2002, Chapter 250
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ENACTS:
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49-11-505, Utah Code Annotated 1953

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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
49-11-102
is amended to read:
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49-11-102. Definitions.
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As used in this title:
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(1) (a) "Active member" means a member who is employed or who has been employed
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by a participating employer within the previous 120 days.
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(b) "Active member" does not include retirees.
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(2) "Actuarial equivalent" means a benefit of equal value when computed upon the
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basis of mortality tables as recommended by the actuary and adopted by the executive director,
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including regular interest.
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(3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
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adopted by the board upon which the funding of system costs and benefits are computed.
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(4) (a) "Agency" means:
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(i) a department, division, agency, office, authority, commission, board, institution, or
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hospital of the state;
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(ii) a county, municipality, school district, local district, or special service district;
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(iii) a state college or university; or
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(iv) any other participating employer.
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(b) "Agency" does not include an entity listed under Subsection (4)(a)(i) that is a
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subdivision of another entity listed under Subsection (4)(a).
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(5) "Allowance" or "retirement allowance" means the pension plus the annuity,
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including any cost of living or other authorized adjustments to the pension and annuity.
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(6) "Alternate payee" means a member's former spouse or family member eligible to
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receive payments under a Domestic Relations Order in compliance with Section
49-11-612
.
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(7) (a) "Amortization rate" means the percent of salary required to gradually reduce the
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unfunded actuarial accrued liability of a system by means of periodic payments sufficient to
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liquidate the debt over a period specified by the board's funding policy.
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(b) "Amortization rate" includes the difference between the normal cost rate and the
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certified contribution rate.
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[(7)] (8) "Annuity" means monthly payments derived from member contributions.

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[(8)] (9) "Appointive officer" means an employee appointed to a position for a definite
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and fixed term of office by official and duly recorded action of a participating employer whose
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appointed position is designated in the participating employer's charter, creation document, or
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similar document, and who earns during the first full month of the term of office $500 or more,
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indexed as of January 1, 1990, as provided in Section
49-12-407
.
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[(9)] (10) (a) "At-will employee" means a person who is employed by a participating
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employer and:
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(i) who is not entitled to merit or civil service protection and is generally considered
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exempt from a participating employer's merit or career service personnel systems;
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(ii) whose on-going employment status is entirely at the discretion of the person's
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employer; or
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(iii) who may be terminated without cause by a designated supervisor, manager, or
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director.
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(b) "At-will employee" does not include a career employee who has obtained a
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reasonable expectation of continued employment based on inclusion in a participating
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employer's merit system, civil service protection system, or career service personnel systems,
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policies, or plans.
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[(10)] (11) "Beneficiary" means any person entitled to receive a payment under this
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title through a relationship with or designated by a member, participant, covered individual, or
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alternate payee of a defined contribution plan.
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[(11)] (12) "Board" means the Utah State Retirement Board established under Section
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49-11-202
.
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[(12)] (13) "Board member" means a person serving on the Utah State Retirement
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Board as established under Section
49-11-202
.
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(14) "Certified contribution rate" means the board certified percent of salary paid on
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behalf of an active member to the office to maintain this system on a financially and actuarially
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sound basis.
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[(13)] (15) "Contributions" means the total amount paid by the participating employer
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and the member into a system or to the Utah Governors' and Legislators' Retirement Plan under
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Chapter 19, Utah Governors' and Legislators' Retirement Act.
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[(14)] (16) "Council member" means a person serving on the Membership Council

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established under Section
49-11-202
.
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[(15)] (17) "Covered individual" means any individual covered under Chapter 20,
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Public Employees' Benefit and Insurance Program Act.
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[(16)] (18) "Current service" means covered service as defined in Chapters 12, 13, 14,
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15, 16, 17, 18, and 19.
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[(17)] (19) "Defined benefit" or "defined benefit plan" or "defined benefit system"
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means a system or plan offered under this title to provide a specified allowance to a retiree or a
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retiree's spouse after retirement that is based on a set formula involving one or more of the
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following factors:
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(a) years of service;
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(b) final average monthly salary; or
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(c) a retirement multiplier.
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[(18)] (20) "Defined contribution" or "defined contribution plan" means any defined
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contribution plan or deferred compensation plan authorized under the Internal Revenue Code
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and administered by the board.
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[(19)] (21) "Educational institution" means a political subdivision or instrumentality of
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the state or a combination thereof primarily engaged in educational activities or the
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administration or servicing of educational activities, including:
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(a) the State Board of Education and its instrumentalities;
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(b) any institution of higher education and its branches;
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(c) any school district and its instrumentalities;
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(d) any vocational and technical school; and
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(e) any entity arising out of a consolidation agreement between entities described under
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this Subsection [(19)] (21).
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[(20)] (22) (a) "Employer" means any department, educational institution, or political
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subdivision of the state eligible to participate in a government-sponsored retirement system
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under federal law.
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(b) "Employer may also include an agency financed in whole or in part by public
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funds.
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[(21)] (23) "Exempt employee" means an employee working for a participating
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employer:

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(a) who is not eligible for service credit under Section
49-12-203
,
49-13-203
,
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49-14-203
,
49-15-203
, or
49-16-203
; and
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(b) for whom a participating employer is not required to pay contributions or
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nonelective contributions.
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[(22)] (24) "Final average monthly salary" means the amount computed by dividing the
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compensation received during the final average salary period under each system by the number
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of months in the final average salary period.
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[(23)] (25) "Fund means any fund created under this title for the purpose of paying
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benefits or costs of administering a system, plan, or program.
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[(24)] (26) (a) "Inactive member" means a member who has not been employed by a
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participating employer for a period of at least 120 days.
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(b) "Inactive member" does not include retirees.
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[(25)] (27) (a) "Member" means a person, except a retiree, with contributions on
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deposit with a system, the Utah Governors' and Legislators' Retirement Plan under Chapter 19,
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Utah Governors' and Legislators' Retirement Act, or with a terminated system.
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(b) "Member" also includes leased employees within the meaning of Section 414(n)(2)
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of the Internal Revenue Code, if the employees have contributions on deposit with the office.
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If leased employees constitute less than 20% of the participating employer's work force that is
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not highly compensated within the meaning of Section 414(n)(5)(c)(ii), Internal Revenue Code,
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"member" does not include leased employees covered by a plan described in Section 414(n)(5)
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of the federal Internal Revenue Code.
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[(26)] (28) "Member contributions" means the sum of the contributions paid to a
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system or the Utah Governors' and Legislators' Retirement Plan, including refund interest if
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allowed by a system, and which are made by:
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(a) the member; and
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(b) the participating employer on the member's behalf under Section 414(h) of the
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Internal Revenue Code.
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[(27)] (29) "Nonelective contribution" means an amount contributed by a participating
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employer into a participant's defined contribution account.
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(30) "Normal cost rate" means the percent of salary that is necessary for a retirement
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system that is fully funded to maintain its fully funded status in combination with the assumed

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rate of return as established by the board.
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[(28)] (31) "Office" means the Utah State Retirement Office.
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[(29)] (32) "Participant" means an individual with voluntary deferrals or nonelective
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contributions on deposit with the defined contribution plans administered under this title.
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[(30)] (33) "Participating employer" means a participating employer, as defined by
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[Chapters 12, 13, 14, 15, 16, 17, and 18] Chapter 12, Public Employees' Contributory
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Retirement Act, Chapter 13, Public Employees' Noncontributory Retirement Act, Chapter 14,
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Public Safety Contributory Retirement Act, Chapter 15, Public Safety Noncontributory
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Retirement Act, Chapter 16, Firefighters' Retirement Act, Chapter 17, Judges' Contributory
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Retirement Act, and Chapter 18, Judges' Noncontributory Retirement Act, or an agency
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financed in whole or in part by public funds which is participating in a system or plan as of
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January 1, 2002.
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[(31)] (34) "Pension" means monthly payments derived from participating employer
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contributions.
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[(32)] (35) "Plan" means the Utah Governors' and Legislators' Retirement Plan created
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by Chapter 19, Utah Governors' and Legislators' Retirement Act, or the defined contribution
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plans created under Section
49-11-801
.
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[(33)] (36) (a) "Political subdivision" means any local government entity, including
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cities, towns, counties, and school districts, but only if the subdivision is a juristic entity that is
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legally separate and distinct from the state and only if its employees are not by virtue of their
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relationship to the entity employees of the state.
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(b) "Political subdivision" includes local districts, special service districts, or
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authorities created by the Legislature or by local governments, including the office.
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(c) "Political subdivision" does not include a project entity created under Title 11,
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Chapter 13, Interlocal Cooperation Act, that was formed prior to July 1, 1987.
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[(34)] (37) "Program" means the Public Employees' Insurance Program created under
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Chapter 20, Public Employees' Benefit and Insurance Program Act, or the Public Employees'
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Long-Term Disability program created under Chapter 21, Public Employees' Long-Term
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Disability Act.
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[(35)] (38) "Public funds" means those funds derived, either directly or indirectly, from
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public taxes or public revenue, dues or contributions paid or donated by the membership of the

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organization, used to finance an activity whose objective is to improve, on a nonprofit basis,
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the governmental, educational, and social programs and systems of the state or its political
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subdivisions.
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[(36)] (39) "Qualified defined contribution plan" means a defined contribution plan
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that meets the requirements of Section 401(k) or Section 403(b) of the Internal Revenue Code.
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[(37)] (40) "Refund interest" means the amount accrued on member contributions at a
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rate adopted by the board.
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[(38)] (41) "Retiree" means an individual who has qualified for an allowance under this
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title.
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[(39)] (42) "Retirement" means the status of an individual who has become eligible,
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applies for, and is entitled to receive an allowance under this title.
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[(40)] (43) "Retirement date" means the date selected by the member on which the
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member's retirement becomes effective with the office.
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[(41)] (44) "Service credit" means:
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(a) the period during which an employee is employed and compensated by a
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participating employer and meets the eligibility requirements for membership in a system or the
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Utah Governors' and Legislators' Retirement Plan, provided that any required contributions are
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paid to the office; and
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(b) periods of time otherwise purchasable under this title.
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[(42)] (45) "System" means the individual retirement systems created by Chapter 12,
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Public Employees' Contributory Retirement Act, Chapter 13, Public Employees'
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Noncontributory Retirement Act, Chapter 14, Public Safety Contributory Retirement Act,
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Chapter 15, Public Safety Noncontributory Retirement Act, Chapter 16, Firefighters'
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Retirement Act, Chapter 17, Judges' Contributory Retirement Act, Chapter 18, Judges'
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Noncontributory Retirement Act, and Chapter 19, Utah Governors' and Legislators' Retirement
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Act.
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(46) "Unfunded actuarial accrued liability" or "UAAL" means the excess, if any, of the
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accrued liability of a retirement system over the actuarial value of its assets as determined by
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the system's actuary.
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[(43)] (47) "Voluntary deferrals" means an amount contributed by a participant into
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that participant's defined contribution account.

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Section 2.
Section
49-11-405
is amended to read:
246
49-11-405. Service credit from different systems or plans -- Eligibility and
247
calculation of service credit.
248
(1) (a) A member who has service credit from two or more systems or one or more
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systems and the Utah Governors' and Legislators' Retirement Plan may combine service credit
250
for purposes of determining eligibility for retirement.
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(b) The provisions of Subsection (1)(a) do not apply to concurrent service.
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(2) To be eligible for the calculation under Subsection (3), the member's service credit
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earned under the different systems or the Utah Governors' and Legislators' Retirement Plan
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shall at least equal the minimum amount of service credit required to retire from the system
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which most recently covered the member.
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(3) If a member meets the requirements of Subsection (2), the office shall calculate the
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member's allowance using all service credit earned from any system or the Utah Governors' and
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Legislators' Retirement Plan, with no actuarial reduction applied to the allowance, except the
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service credit used to calculate the benefit shall be increased or decreased to reflect the value of
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the assets transferred.
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(4) The office shall establish the standards used for calculating any increase or decrease
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in the service credit.
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(5) This section does not apply to a retiree who is subject to [Section] Sections
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49-11-504
and
49-11-505
.
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Section 3.
Section
49-11-504
is amended to read:
266
49-11-504. Reemployment of a retiree -- Restrictions.
267
(1) As used in this section and Section
49-11-505
:
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(a) "Full-time" means:
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(i) employment requiring 20 or more hours of work per week; or
270
(ii) at least a half-time teaching contract.
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(b) "Reemployed," "reemploy," or "reemployment" means service after retirement, in
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exchange for compensation.
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(2) (a) Except for the provisions of Subsections (1) and (3), the provisions of this
274
section do not apply to a person who is subject to the provisions of Section
49-11-505
.
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(b) This section does not apply to elected positions.

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[(1)] (3) A person who [retires from a nonparticipating employer] is not a retiree under
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this title is not subject to any postretirement restrictions under this title.
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[(2) A retiree of an agency who returns to work at a different agency is not subject to
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any postretirement restrictions under this section and may not earn additional service credit.]
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[(3) For the purposes of Subsections (4) and (5), "full-time" employment means
281
employment requiring 20 hours of work per week or more or at least a half-time teaching
282
contract.]
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(4) A retiree of an agency who is reemployed may not earn additional service credit, if
284
the retiree is reemployed by:
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(a) a different agency; or
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(b) the same agency after six months from the retirement date.
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[(4)] (5) A retiree of an agency who is reemployed on a full-time basis by the same
288
agency within six months of the date of retirement is subject to the following:
289
(a) the agency shall immediately notify the office;
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(b) the office shall cancel the retiree's allowance and reinstate the retiree to active
291
member status;
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(c) the allowance cancellation and reinstatement to active member status is effective on
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the first day of the month following the date of reemployment;
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(d) the reinstated retiree may not retire again with a recalculated benefit for a two-year
295
period from the date of cancellation of the original allowance, and if the retiree retires again
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within the two-year period, the original allowance shall be resumed; and
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(e) a reinstated retiree retiring after the two-year period shall be credited with the
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service credit in the retiree's account at the time of the first retirement and from that time shall
299
be treated as a member of a system, including the accrual of additional service credit, but
300
subject to recalculation of the allowance under Subsection (9) .
301
[(5)] (6) A retiree of an agency who is reemployed by the same agency within six
302
months of retirement on a less than full-time basis by the same agency is subject to the
303
following:
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(a) the retiree may earn, without penalty, compensation from that position which is not
305
in excess of the exempt earnings permitted by Social Security;
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(b) if a retiree receives compensation in a calendar year in excess of the Social Security

307
limitation, 25% of the allowance shall be suspended for the remainder of the six-month period;
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(c) the effective date of a suspension and reinstatement of an allowance shall be set by
309
the office; and
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(d) any suspension of a retiree's allowance under this Subsection [(5)] (6) shall be
311
applied on a calendar year basis.
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[(6)] (7) For six months immediately following retirement, the retiree and participating
313
employer who are subject to Subsection (6) shall:
314
(a) maintain an accurate record of gross earnings in employment;
315
(b) report the gross earnings at least monthly to the office;
316
(c) immediately notify the office in writing of any postretirement earnings under
317
Subsection [(4)] (6); and
318
(d) immediately notify the office in writing whether postretirement earnings equal or
319
exceed the exempt earnings under Subsection [(5)] (6).
320
[(7) A retiree of an agency who is reemployed by the same agency after six months
321
from the retirement date is not subject to any postretirement restrictions under this title and
322
may not earn additional service credit.]
323
(8) [(a)] If a participating employer hires a [nonexempt] retiree who may not earn
324
additional service credit under [this section] Subsection (4), the participating employer shall
325
contribute the [same percentage of a retiree's salary that the participating employer would have
326
been required to contribute if the retiree were an active member, up to the amount allowed by
327
federal law.] amortization rate, as defined under Section
49-11-102
, for the retiree to the office
328
to be credited to the system that would have covered the retiree in the new position.
329
[(b) The contributions shall be paid to a retiree-designated:]
330
[(i) qualified defined contribution plan administered by the board, if the participating
331
employer participates in a qualified defined contribution plan administered by the board; or]
332
[(ii) qualified defined contribution plan offered by the participating employer if the
333
participating employer does not participate in a qualified defined contribution plan
334
administered by the board.]
335
[(c) Notwithstanding the provisions of Subsection (8)(b), if an employer is not
336
participating in a qualified defined contribution plan administered by the board, the employer
337
may elect to pay the contributions to a nonqualified deferred compensation plan administered

338
by the board.]
339
(9) [Notwithstanding any other provision of this section, a] A retiree who has returned
340
to work, accrued additional service credit, and again retires shall have the retiree's allowance
341
recalculated using:
342
(a) the formula in effect at the date of the retiree's original retirement for all service
343
credit accrued prior to that date; and
344
(b) the formula in effect at the date of the subsequent retirement for all service credit
345
accrued between the first and subsequent retirement dates.
346
[(10) This section does not apply to elected positions.]
347
[(11)] (10) The board may make rules to implement this section.
348
Section 4.
Section
49-11-505
is enacted to read:
349
49-11-505. Reemployment of a retiree -- Restrictions.
350
(1) (a) This section applies to a retiree who begins reemployment with a participating
351
employer on or after July 1, 2010.
352
(b) This section does not apply to elected positions.
353
(2) (a) A participating employer who hires a retiree subject to this section on a
354
full-time basis shall immediately notify the office.
355
(b) The office shall:
356
(i) cancel the retiree's allowance on the first day of the month following the date of
357
employment; and
358
(ii) reinstate the retiree to active member status effective on the first day of the month
359
following the date of reemployment.
360
(3) (a) A retiree subject to Subsection (2) who retires within two years from the date of
361
reemployment:
362
(i) is not entitled to a recalculated retirement benefit; and
363
(ii) will resume the allowance that was being paid at the time of cancellation.
364
(b) A retiree subject to this section who retires two or more years after the date of
365
reemployment shall be credited with additional service credit as a member of the system.
366
(4) A retiree who has returned to work, accrued additional service credit, and again
367
retires shall:
368
(a) resume receiving the allowance that was being paid at the time of cancellation; and

369
(b) receive an additional allowance based on the formula in effect at the date of the
370
subsequent retirement for all service credit accrued between the first and subsequent retirement
371
dates.
372
(5) A retiree of an agency who is reemployed on a less than full-time basis is subject to
373
the following:
374
(a) the retiree may earn, without penalty, compensation from that position which is not
375
in excess of the exempt earnings permitted by Social Security;
376
(b) if a retiree receives compensation, from a participating employer, in a calendar year
377
in excess of the Social Security limitation, 25% of the allowance shall be suspended;
378
(c) the effective date of a suspension and reinstatement of an allowance shall be set by
379
the office; and
380
(d) any suspension of a retiree's allowance under this Subsection (5) shall be applied on
381
a calendar year basis.
382
(6) A retiree and participating employer who are subject to Subsection (5) shall:
383
(a) maintain an accurate record of gross earnings in the employment;
384
(b) report the gross earnings at least monthly to the office;
385
(c) immediately notify the office in writing of any postretirement earnings under
386
Subsection (5); and
387
(d) immediately notify the office in writing whether the postretirement earnings equal
388
or exceed the exempt earnings under Subsection (5).
389
(7) The board may make rules to implement this section.
390
Section 5.
Section
49-12-701
is amended to read:
391
49-12-701. Early retirement incentive -- Eligibility -- Calculation of benefit --
392
Payment of costs -- Savings to be appropriated by Legislature -- Restrictions on
393
reemployment.
394
(1) Any member of this system may retire and receive the allowance allowed under
395
Subsection (2) if the member meets the following requirements as of the member's retirement
396
date:
397
(a) the member is eligible for retirement under Section
49-12-401
, or has 25 years of
398
service credit;
399
(b) the member elects to forfeit any stipend for retirement offered by the participating

400
employer; and
401
(c) the member elects to retire from this system by applying for retirement by the date
402
established under Subsection (3)(a) or (3)(b).
403
(2) (a) A member who retires under Subsection (1) shall receive 2% of that member's
404
final average salary for all years of service credit.
405
(b) An actuarial reduction may not be applied to the allowance granted under this
406
section.
407
(3) In order to receive the allowance allowed by this section, a member shall submit an
408
application to the office as follows:
409
(a) (i) For state and school employees under Level A, the application shall be filed by
410
May 31, 1987. The member's retirement date shall then be set by the member on the 1st or 16th
411
day of July, August, or September, 1987.
412
(ii) If a Level A member elects to retire, the executive director or participating
413
employer may request the member to delay the retirement date until a later date, but no later
414
than June 30, 1988.
415
(iii) If the member agrees to delay the retirement date, the retirement date shall be
416
delayed, but service credit may not be accrued after the member's original retirement date
417
elected by the member, and compensation earned after the member's original retirement date
418
may not be used in the calculation of the final average salary for determining the retirement
419
allowance.
420
(b) (i) For political subdivision employees under Level B, the application shall be filed
421
by September 30, 1987.
422
(ii) The retirement date shall then be set by the member on the 1st or 16th day of July,
423
August, September, October, November, or December, 1987.
424
(4) (a) The cost of providing the allowance under this section shall be funded in fiscal
425
year 1987-88 by a supplemental appropriation in the 1988 General Session based on the
426
retirement contribution rate increase established by the consulting actuary and approved by the
427
board.
428
(b) The cost of providing the allowance under this section shall be funded beginning
429
July 1, 1988, by means of an increase in the retirement contribution rate established by the
430
consulting actuary and approved by the board.

431
(c) The rate increase under Subsections (4)(a) and (b) shall be funded:
432
(i) for state employees, by an appropriation from the account established by the
433
Division of Finance under Subsection (4)(d), which is funded by savings derived from this
434
early retirement incentive and a work force reduction;
435
(ii) for school employees, by direct contributions from the employing unit, which may
436
not be funded through an increase in the retirement contribution amount established in Title
437
53A, Chapter 17a, Minimum School Program Act; and
438
(iii) for political subdivisions under Level B, by direct contributions by the
439
participating employer.
440
(d) (i) Each year, any excess savings derived from this early retirement incentive which
441
are above the costs of funding the increase and the costs of paying insurance, sick leave,
442
compensatory leave, and vacation leave under Subsections (4)(c)(i) and (c)(ii) shall be reported
443
to the Legislature and shall be appropriated as provided by law.
444
(ii) In the case of Subsection (4)(c)(i), the Division of Finance shall establish an
445
account into which all savings derived from this early retirement incentive shall be deposited as
446
the savings are realized.
447
(iii) In the case of Subsection (4)(c)(ii), the State Office of Education shall certify the
448
amount of savings derived from this early retirement incentive.
449
(iv) The State Office of Education and the participating employer may not spend the
450
savings until appropriated by the Legislature as provided by law.
451
(5) A member who retires under this section is subject to [Section] Sections
49-11-504
452
and
49-11-505
.
453
(6) The board may adopt rules to administer this section.
454
(7) The Legislative Auditor General shall perform an audit to ensure compliance with
455
this section.
456
Section 6.
Section
49-13-701
is amended to read:
457
49-13-701. Early retirement incentive -- Eligibility -- Calculation of benefit --
458
Payment of costs -- Savings to be appropriated by Legislature -- Restrictions on
459
reemployment.
460
(1) Any member of this system may retire and receive the allowance allowed under
461
Subsection (2) if the member meets the following requirements as of the member's retirement:

462
(a) the member is eligible for retirement under Section
49-13-401
, or has 25 years of
463
service credit;
464
(b) the member elects to forfeit any stipend for retirement offered by the participating
465
employer; and
466
(c) the member elects to retire from this system by applying for retirement by the date
467
established under Subsection (3)(a) or (3)(b).
468
(2) (a) A member who retires under Subsection (1) shall receive 2% of that member's
469
final average salary for all years of service credit.
470
(b) No actuarial reduction may be applied to the allowance granted under this section.
471
(3) In order to receive the allowance allowed by this section, a member shall submit an
472
application to the office as follows:
473
(a) (i) For state and school employees under Level A, the application shall be filed by
474
May 31, 1987. The member's retirement date shall then be set by the member on the 1st or 16th
475
day of July, August, or September, 1987.
476
(ii) If a Level A member elects to retire, the executive director or participating
477
employer may request the member to delay the retirement date until a later date, but no later
478
than June 30, 1988.
479
(iii) If the member agrees to delay the retirement date, the retirement date shall be
480
delayed, but service credit may not be accrued after the member's original retirement date
481
elected by the member, and compensation earned after the member's original retirement date
482
may not be used in the calculation of the final average salary for determining the retirement
483
allowance.
484
(b) (i) For political subdivision employees under Level B, the application shall be filed
485
by September 30, 1987.
486
(ii) The member's retirement date shall then be set by the member on the 1st or 16th
487
day of July, August, September, October, November, or December, 1987.
488
(4) (a) The cost of providing the allowance under this section shall be funded in fiscal
489
year 1987-88 by a supplemental appropriation in the 1988 General Session based on the
490
retirement contribution rate increase established by the consulting actuary and approved by the
491
board.
492
(b) The cost of providing the allowance under this section shall be funded beginning

493
July 1, 1988, by means of an increase in the retirement contribution rate established by the
494
consulting actuary and approved by the board.
495
(c) The rate increase under Subsections (4)(a) and (b) shall be funded:
496
(i) for state employees, by an appropriation from the account established by the
497
Division of Finance under Subsection (4)(d), which is funded by savings derived from this
498
early retirement incentive and a work force reduction;
499
(ii) for school employees, by direct contributions from the employing unit, which may
500
not be funded through an increase in the retirement contribution amount established in Title
501
53A, Chapter 17a, Minimum School Program Act; and
502
(iii) for political subdivisions under Level B, by direct contributions by the
503
participating employer.
504
(d) (i) Each year, any excess savings derived from this early retirement incentive which
505
are above the costs of funding the increase and the costs of paying insurance, sick leave,
506
compensatory leave, and vacation leave under Subsections (4)(c)(i) and (c)(ii) shall be reported
507
to the Legislature and shall be appropriated as provided by law.
508
(ii) In the case of Subsection (4)(c)(i), the Division of Finance shall establish an
509
account into which all savings derived from this early retirement incentive shall be deposited as
510
the savings are realized.
511
(iii) In the case of Subsection (4)(c)(ii), the State Office of Education shall certify the
512
amount of savings derived from this early retirement incentive.
513
(iv) The State Office of Education and the participating employer may not spend the
514
savings until appropriated by the Legislature as provided by law.
515
(5) A member who retires under this section is subject to [Section] Sections
49-11-504
516
and
49-11-505
.
517
(6) The board may make rules to administer this section.
518
(7) The Legislative Auditor General shall perform an audit to ensure compliance with
519
this section.
520
Section 7.
Section
49-14-402
is amended to read:
521
49-14-402. Calculation of retirement allowance.
522
(1) A retiree under this system shall receive an allowance equal to:
523
(a) 2.5% of final average monthly salary multiplied by the number of years of service

524
credit, limited to 20 years; plus
525
(b) 2% of final average monthly salary, multiplied by the number of years of service
526
credit in excess of 20 years.
527
(2) (a) Except as modified by cost-of-living adjustments and except as provided under
528
Subsection (2)(b), an allowance under this system may not exceed 70% of a retiree's final
529
average monthly salary.
530
(b) The allowance limitation under Subsection (2)(a) does not apply to a member who
531
initially retires on or after July 1, 2010.
532
Section 8.
Section
49-15-402
is amended to read:
533
49-15-402. Calculation of retirement benefit.
534
(1) A retiree under this system shall receive an allowance equal to:
535
(a) 2.5% of final average monthly salary multiplied by the number of years of service
536
credit, limited to 20 years; plus
537
(b) 2% of final average monthly salary, multiplied by the number of years of service
538
credit in excess of 20 years.
539
(2) (a) Except as modified by cost-of-living adjustments and except as provided under
540
Subsection (2)(b), an allowance under this system may not exceed 70% of a retiree's final
541
average monthly salary.
542
(b) The allowance limitation under Subsection (2)(a) does not apply to a member who
543
initially retires on or after July 1, 2010.
544
Section 9.
Section
49-16-203
is amended to read:
545
49-16-203. Exemption of certain employees from coverage -- Exception.
546
(1) A firefighter service employee serving as the chief of any fire department or district
547
is excluded from coverage under this system if that firefighter service employee files a formal
548
written request seeking exemption.
549
(2) The chief of any fire department or district who retires from that position shall
550
comply with the provisions of [Section] Sections
49-11-504
and
49-11-505
upon
551
reemployment by the participating employer.
552
Section 10.
Section
49-16-402
is amended to read:
553
49-16-402. Calculation of retirement allowance.
554
(1) A retiree under this system shall receive an allowance equal to:

555
(a) 2.5% of final average monthly salary multiplied by the number of years of service
556
credit, limited to 20 years; plus
557
(b) 2% of final average monthly salary, multiplied by the number of years of service
558
credit in excess of 20 years.
559
(2) The minimum allowance payable under this section is $500.
560
(3) (a) Except as modified by cost-of-living adjustments and except as provided under
561
Subsection (3)(b), an allowance under this system may not exceed 70% of a firefighter service
562
employee's final average monthly salary.
563
(b) The allowance limitation under Subsection (3)(a) does not apply to a member who
564
initially retires on or after July 1, 2010.
565
Section 11.
Section
49-17-402
is amended to read:
566
49-17-402. Calculation of retirement allowance.
567
(1) A retiree under this system shall receive an allowance equal to:
568
(a) 5% of the final average monthly salary multiplied by the number of years of service
569
credit, limited to 10 years; plus
570
(b) 2.25% of the final average monthly salary multiplied by the number of years of
571
service credit in excess of 10 years and up to and including 20 years; plus
572
(c) 1% of the final average monthly salary multiplied by the number of years of service
573
credit in excess of 20 years.
574
(2) (a) Except as modified by cost-of-living adjustments and except as provided under
575
Subsection (2)(b), an allowance under this system may not exceed 75% of the member's final
576
average monthly salary.
577
(b) The allowance limitation under Subsection (2)(a) does not apply to a member who
578
initially retires on or after July 1, 2010.
579
(3) If the retiree has attained the age of 55 years and has 20 years or more of service
580
credit, the retiree shall receive an early retirement reduction to the allowance based on an
581
actuarial calculation assuming a normal retirement age of 65 years.
582
Section 12.
Section
49-18-402
is amended to read:
583
49-18-402. Calculation of retirement allowance.
584
(1) A retiree under this system shall receive an allowance equal to:
585
(a) 5% of the final average monthly salary multiplied by the number of years of service

586
credit, limited to 10 years; plus
587
(b) 2.25% of the final average monthly salary multiplied by the number of years of
588
service credit in excess of 10 years and up to and including 20 years; plus
589
(c) 1% of the final average monthly salary multiplied by the number of years of service
590
credit in excess of 20 years.
591
(2) (a) Except as modified by cost-of-living adjustments and except as provided under
592
Subsection (2)(b), an allowance under this system may not exceed 75% of the member's final
593
average monthly salary.
594
(b) The allowance limitation under Subsection (2)(a) does not apply to a member who
595
initially retires on or after July 1, 2010.
596
(3) If the retiree has attained the age of 55 years and has 20 years or more of service
597
credit, the retiree shall receive an early retirement reduction to the allowance based on an
598
actuarial calculation assuming a normal retirement age of 65 years.
599
Section 13. Effective date.
600
This bill takes effect on July 1, 2010.